Mark-To-Market
Mark-to-market is the practice of re-pricing what you hold, right now, at today's market value instead of at what you originally paid for it. Rather than leaving a position on the books at its purchase price until it's sold, a broker or fund recalculates its worth using the current market price, and that new value flows into your account equity.
In practice this happens automatically and continuously during the trading day at most brokers, and formally at the close of each session. If you bought a stock at $50 and it's now trading at $53, your account equity reflects that $3-per-share gain even though you haven't sold anything — it's an unrealized gain until you close the position, but it's counted for the purposes of your account balance, margin calculations, and buying power.
The nuance that trips people up is the difference between "marked" value and "realized" value. Mark-to-market P&L can swing your account equity up and down all day without a single trade happening, purely because prices move. That paper gain or loss becomes real (realized) only when you actually close the position. Until then, it's a snapshot, not a settled outcome.
This matters most for leveraged or margined positions, because the mark determines whether you're meeting margin requirements. A position that looks fine at yesterday's close can trigger a margin call today purely from an adverse mark, with no new trade involved.
This term depends on a rule or threshold that changes over time, so no specific figure is quoted here. The general mechanism (positions revalued to current market price, daily and often intraday) is stable, but exact mechanics of when/how marks are applied for margin purposes, and any specific frequency or timing rules, can vary by broker and by regulator (e.g., FINRA/exchange rules on margin and closing marks). Confirm specific timing or threshold claims against the broker's margin agreement or FINRA rules before publishing if any are added.
A day trader's real-time buying power, margin cushion, and any margin call are all driven by mark-to-market equity, not by what was originally paid — so unrealized losses can restrict your ability to trade or force liquidation before you've decided to exit.
You buy 500 shares of a stock at $20 ($10,000 cost). By 1pm it's trading at $18.50. Your account is marked to show an unrealized loss of $750, and your equity drops by that amount even though you still hold the shares and haven't sold. If that drop pushes your margin cushion below what's required, your broker may issue a margin call or reduce your buying power for new trades, even though you never clicked sell.
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